In 1920, Ludwig von Mises dropped a bombshell on the European economic world with his article called “Economic Calculation in the Socialist Commonwealth.” It argued that socialism was impossible as an economic system. It set off two decades of debate, so by the time the essays appeared in English, in this very book here, in 1935, the debate was still raging. This volume edited by F.A. Hayek dug the knife into socialism’s heart unlike any book to ever appear. It contains essays by Mises along with a foreword and afterword by Hayek. It also contains more commentary by N.G. Pierson, George Halm, and Enrico Barone.
It is exceptionally well edited and beautifully argued, and has not been in print for many years. The contents are nothing short of prophetic.
The so-called “Calculation Argument” has never been answered. It shows that without private property in capital goods, there can be no prices and hence no data available for cost accounting. Production becomes random at best, and completely irrational. Mises had convinced his generation and this book completely devastates the whole socialist apparatus from a theoretical point of view.
No one interested in this debate can afford not to be well-versed in the contents of this book.
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F. A. Hayek (1899–1992) is undoubtedly the most eminent of the modern Austrian economists, and a founding board member of the Mises Institute. Student of Friedrich von Wieser, protégé and colleague of Ludwig von Mises, and foremost representative of an outstanding generation of Austrian School theorists, Hayek was more successful than anyone else in spreading Austrian ideas throughout the English-speaking world. He shared the 1974 Nobel Prize in Economics with ideological rival Gunnar Myrdal ”for their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena.” Among mainstream economists, he is mainly known for his popular The Road to Serfdom (1944).
Fifty years ago today, December 11, 1974, F.A. Hayek gave his Nobel Lecture in Sweden. The conflict between what the public expects science to achieve in satisfaction of popular hopes, and what is really in its power, is a serious matter.
Routledge & Kegan Paul LTD, London, 1963
